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For this assignment, you work for the marketing manager of an
organization that is going to launch a new line of personal care
products in the U.S. market. The proposed target market will be males,
between 18 and 35 years old, and price points will cover income ranges
from lower to mid-level. Distribution is planned to take place in
drugstores, grocery stores, and stores such as Wal-Mart and Target, with
the primary retailer carrying the full product line being drugstores.
You have been tasked with a consumer behavior analysis to help make
marketing decisions.
Write a four to five (4-5) page paper in which you:
- Propose a type of message appeal to be used in the advertising, making sure to explain the rationale behind the appeal.
- Analyze the different cultures this product will appeal to and make recommendations on which three (3) would be the best choice.
- Decide which microcultures and additional demographics should be targeted.
- Suggest ways to utilize group influence in the marketing of the product.
- Create a plan to address need recognition, search behavior, and getting the product into the consumers’ consideration set.
- Use at least two (2) quality references. Note: Wikipedia and other Websites do not quality as academic resources.
Your assignment must follow these formatting requirements:
- Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA. Check with your professor for any additional instructions.
- Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.
The specific course learning outcomes associated with this assignment are:
- Analyze the internal influences that affect consumer behavior.
- Analyze the external influences that affect consumer behavior.
- Assess the consumer decision-making process.
- Use technology and information resources to research issues in consumer behavior.
- Write clearly and concisely about consumer behavior using proper writing mechanics
MKT305: Week 7 Lecture 1: Consumer Behavior: Consumers in Situations
Slide #
Topics
Narration
Slide 1
Introduction
Welcome to Consumer Behavior.
In this lesson we will discuss consumers in situations.
Next slide.
Slide 2
Topics
The following topics will be covered in this lesson:
Situations and value;
Time and consumer behavior;
Time pressure;
Time of year;
Time of day or circadian cycles;
Advertiming;
Place shapes shopping activities;
Shopping and shopping activities;
Shopping values;
Impulsive shopping and consumption;
Impulsive versus unplanned consumer behavior;
Distinguishing impulsive and unplanned consumer behavior;
Susceptibility to situational effects;
Consumer self-regulation;
Impulsive versus compulsive behavior;
Retail and service atmospherics;
Atmosphere elements;
Antecedent conditions;
Economic resources;
Orientation;
Mood; and
Security and fearfulness.
Next slide.
Slide 3
Topics, continued
Slide 4
Situations and Value
You should recall from a previous lesson that situational influences have an effect on our behavior as consumers. As a review, situational influences are temporary conditions that can affect communication, shopping, brand preference, purchases, and consumption. What this means is that we act differently in different situations. The context of the situation will have an impact upon our behavior. That said, the value that we receive from a purchase will vary as well based on the context in which the act takes place. These situational influences affect our decision-making and the eventual value experienced.
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Slide 4
Time and Consumer Behavior
Do you sometimes feel like there is not enough time in the day to get everything done that you want to? Probably, your answer is a resounding, yes! We are all time crunched in this fast-paced, technological world we live in. Our time though, is extremely valuable. We spend time working to earn money to pay the bills, raise children, and to improve our quality of life. We also need to have time available for consumption activities such as shopping, cleaning the house, mowing the lawn, and participating in some fun activities with friends and family. Our lives also involve pressures involving time such as meeting deadlines that occur daily or at recurring times of the year. Situational characteristics that relate to time are referred to as temporal factors.
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Slide 5
Time Pressure
Our world is full of pressures related to time. Some are self-imposed, while others are not. The urgency with which a consumer must make a decision based on a real or self-imposed deadline is known as time pressure. You have undoubtedly experienced having to make a decision without the benefit of time. When this occurs, consumers will react in different ways. When time is minimal, less information is processed by consumers. It has been found that they are able to remember less information about product choices than consumers in the same situation who have sufficient time. Secondly, time pressured consumers are more apt to make choices that are simple versus a situation where more time is available to choose. They might simply pick a high quality, well-known brand since they don’t have time to weigh other options. Third, consumers with time pressure prefer to shop alone than with others.
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Slide 6
Time of Year
The time of year may also have an effect on the value we receive from the consumption process. Regularly occurring conditions that vary with the time of year is known as seasonality. We are familiar with this term as it relates to the four seasons of the year. But, our consumption habits and value received is different depending upon the time of the year. For instance, parents are very familiar with the numerous items that children need throughout the academic school year. School pictures, sports physicals, and graduation events are all examples of conditions that vary with the time of year in an academic setting. Many areas of the country have seasonal fruits and vegetables that are popular such as the winter strawberry season in Florida and the fall apple season in upstate New York. The weather may also dictate purchase decisions related to apparel to accommodate the season. Interestingly, it has been discovered that consumers tend to shop earlier in the day during the winter months and spend more money during the summer months.
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Slide 7
Time of Day or Circadian Circles
Now, let’s discuss a bit of biology for a moment. The human body is greatly affected by the time of day. Our bodies have a set rhythm that varies with the time of day. This is known as a circadian cycle. Our circadian cycle is partly responsible for our sleep and wake times and how productive we are. Many individuals experience the afternoon slump that occurs between one p.m. and three p.m. whereby they feel tired and may lack motivation. A host of products are available to consumers to help them gain extra energy, as well as all of the well-known caffeinated beverages that consumers rely on for a boost such as coffee, hot tea, soda, and iced tea.
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Slide 8
Advertiming
Marketers are aware that as consumers, we are in need of specific products to help us solve problems. Some problems that need to be solved may occur at different times of the day or year. For instance, consumers who live in areas that get snow in the winter will need products such as salt for de-icing, winter tires, battery chargers, and windshield scrapers. However, consumers may not be as receptive to advertisements and marketing messages received about products such as this during the warm, summer months. Advertiming is when a company buys advertising to be conducted at a set time when consumers will be most receptive.
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Slide 9
Check Your Understanding
Slide 10
Place Shapes Shopping Activities
Our options for the places that we shop have increased dramatically over the past few years. Now, consumers may regularly shop online via their tablet computers or cell phones. It is not necessary to go to an actual brick and mortar store to purchase some products. Some consumers do not reside in areas of the country that have many retail establishments located nearby and due to this, they may be forced to shop online to obtain the products they need.
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Slide 11
Shopping and Shopping Activities
You undoubtedly know what shopping is since it is something that all consumers must do. Officially, shopping is defined as a set of value-producing activities that increase the chances that something will be purchased. But, as you can see from the definition, shopping does not have to conclude with a purchase. Shopping activities take place in specific places and under specific conditions or contexts and occur in situations that are not easily controlled by the consumer. For instance, the store may be crowded, the consumer may be in a bad mood, or perhaps the consumer feels rushed during her shopping experience. These situations can have an effect on how we shop and whether or not we make a purchase.
Four different types of shopping have been identified. The first, acquisitional shopping, involves activities geared at a specific, intended purchase. A woman who buys groceries for her family each week is participating in acquisitional shopping. This type of shopping is more task-like in orientation. The second type is known as epistemic shopping. Epistemic shopping is oriented toward acquiring knowledge about a product. A consumer interested in buying a home would benefit from acquiring knowledge about local housing prices and financing options for example. Experiential shopping is the third type and it involves recreational-oriented activities that offer excitement, relaxation, fun, or social interaction. Some people may shop for something to do or to have time to catch up with a friend during a shopping outing or they may shop because they are bored. The last type of shopping is impulsive shopping. Impulsive shopping involves spontaneous activities that are characterized by a decreased regard for consequences, increased emotional involvement, and a desire for immediate gratification.
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Slide 12
Shopping Value
What motivates consumers to shop? Of course, it is necessary to purchase goods for survival reasons. However, some consumers receive great value from their actual shopping experience even without making a purchase. Some consumers may receive a different level of value from their shopping experience than others. The personal shopping value is the overall worth of a shopping activity when all related costs and benefits are considered.
The retail environment that we shop in can have a personality. This may sound silly, but it is true. A retail personality is how a store is defined in the mind of the shopper based on the functional qualities of the store and the affective qualities. When we say functional qualities, we mean the basic features of a retail store that facilitates the shopping experience. The affective qualities refer to the ways that retail establishments create an emotionally rewarding shopping environment. For instance, shopping at a Macy’s department store is a different type of experience than shopping at Walmart or Target.
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Slide 13
Impulsive Shopping and Compulsion
Previously in this lesson, you learned a little about impulsive shopping. Impulsive shopping is something that most consumers do at one time or another. To expand a bit further on this concept, impulsive consumption is characterized by three components. The first is that impulsive acts are typically spontaneous. Secondly, impulsive acts are usually associated with a decreased regard for consequences. Lastly, impulsive acts are often motivated by a need for immediate self-gratification and fulfillment with high levels of emotional involvement.
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Slide 14
Impulsive Versus Unplanned Consumer Behavior
You might think that impulsive shopping is the same as unplanned shopping, but there are some differences between the two. The first difference is that unplanned consumer behaviors are characterized by situational memory. This means that there is something in the environment that prompts us to remember that we need to purchase something. For instance, a woman is shopping for groceries for the family for the week with her grocery list. However, the list does not contain an item that she needs. When the woman sees the item on the shelf in the store, she remembers that she needs it and she puts it in her cart for purchase. The woman has made an unplanned purchase.
The second difference between impulsive and unplanned consumer behavior is that unplanned consumer behavior has a utilitarian orientation meaning that little emotional involvement is expended regarding the purchase. Impulsive shopping and unplanned shopping both involve spontaneity since both involve purchases made without any deliberation or prior decision making involved.
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Slide 15
Check Your Understanding
Slide 16
Distinguishing Impulsive and Unplanned Consumer Behavior
At times, it is not easy to distinguish between impulsive consumer behavior and unplanned consumer behavior. The line between the two is sometimes fuzzy since some unplanned behaviors are impulsive and some impulsive acts are unplanned. Simple unplanned behavior typically doesn’t include much emotional involvement or any significant levels of self-fulfillment or gratification. Further, often unplanned purchases involve very minimal consequences and because of this, they do not really have negative consequences.
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Slide 17
Susceptibility to Situational Effects
How susceptible are consumers to both impulsive and unplanned consumer behavior? The answer to this question is that consumers are very susceptible to both, but not all consumers are equally susceptible. For example, a consumer who is frugal by nature is less susceptible to making either an impulsive or unplanned purchase in comparison to a consumer who is highly materialistic. Our individual characteristics are partly responsible for our consumer behaviors. Impulsivity is a personality trait that represents how sensitive a consumer is to immediate rewards. Consumers with high impulsivity are more prone to impulsive acts.
Retailers capitalize on our susceptibility as consumers by providing retail shopping environments, merchandising, free samples, music and knowledgeable salespeople to encourage us to make purchases. Online retailers have created transaction processes that are simple which may encourage some consumers to make purchases online.
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Slide 18
Consumer Self-Regulation
One way that consumers control their purchase behaviors is through what is called self-regulation. Consumer self-regulation is the tendency for a consumer to inhibit outside influences from interfering with their shopping. As you can probably imagine, some consumers are much better at self-regulating their behavior than others. Consumers with a high ability to self-regulate are referred to as action-oriented. Action-oriented consumers are not as affected by the emotions that are generated through the shopping experience. Consumers with a low ability to self-regulate are referred to as state-oriented. State-oriented consumers have a higher level of emotional involvement and are more likely to make an unplanned purchase than an action-oriented consumer.
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Slide 19
Impulsive Versus Compulsive
You have already learned what impulsive consumer behavior is and its characteristics. Compulsive consumer behavior shares some of its characteristics with impulsive behavior. Both behaviors involve a certain degree of emotional involvement and possess the possibility for negative consequences. However, compulsive behavior differs from impulsive behavior in three ways.
The first is that compulsive behavior is harmful. Secondly, compulsive behavior is somewhat uncontrollable. The last difference is that compulsive behavior is driven by chronic depression. Think about a consumer who is obsessed with buying shoes. She has over three hundred pairs of shoes in her closet, yet she still keeps buying more. Her behavior can be considered harmful and out of control because she is not in a financial position to be able to afford all of the shoes she is buying. As a result, she is unable to pay her rent for two months and is evicted from her apartment. Later on in our lesson, we discuss compulsive behavior in more depth and address the chronic depression component.
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Slide 20
Retail and Service Atmospherics
You have already learned that the physical environment plays a significant role in a consumer’s shopping behavior, value received, and satisfaction. To expand upon this a bit, let’s talk about atmospherics. Atmospherics refers to the emotional nature of an environment and the feelings it creates when all of the physical attributes are combined. The functional quality of the environment is a description of the total attributes that make the shopping experience efficient for the consumer. Examples of functional qualities of the environment are convenience, wide selection, low prices, and knowledgeable employees. A consumer who takes their car to Jiffy Lube in their neighborhood for an oil and filter change is maximizing upon the functional qualities of this type of business. This is also an example of what is known as a service environment. In a service environment, consumers rely upon the expertise of the employees, the convenience of the environment, and the capability of all staff.
On the flip side, the affective quality is a representation of the emotional meaning of the environment resulting from the total effect of all attributes that affect how the consumer feels in the environment. For instance, consumers who visit an amusement park such as Disneyland or SeaWorld realize the ambiance of the environment as soon as they step through the entrance gate. Using colors, lights, music, and smells, these parks have done their homework regarding how they want their visitors to feel. Further, the staff is trained to be extremely friendly and helpful.
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Slide 21
Atmosphere Elements
Now let’s talk about the specific elements of the atmosphere that can have an impact on a consumer’s perception of a shopping environment. Merchants use odors, music, color, and merchandising to create a positive shopping environment that is pleasant and prompts consumers to make purchases. In terms of odors, retailers use them because they have an effect on our cognitive processing of information. For instance, citrus smells have been found to create higher levels of pleasant emotions and increased receptivity to product information.
The use of music in retail atmospheres can have a strong effect on consumers. Foreground music is music that becomes the point of attention for the consumer and it can have a strong effect on a consumer’s willingness to approach or avoid an environment. Think about a retail establishment that is playing a type of music that the consumer does not like. The likelihood that the consumer will remain in this store to shop decreases significantly. Music played below the audible threshold is known as background music. Most service providers and retailers typically provide some type of background music for shoppers.
Color is also used to affect consumer reactions and perceptions since consumers respond differently to different colors. For example, blue is a color that is universally liked. Consumers who see a product in a predominantly blue background often think the product is of higher quality and because of this they are willing to pay more for it. On the other hand, red and orange promote feelings of poor quality and low price.
Merchandising refers to how products are placed and displayed to increase the chances that consumers will purchase the products. This is accomplished through the use of specific product displays, visual imagery, and signage that is appealing to consumers. Merchandising at its finest can be seen in high end department stores with much thought and energy put into how the merchandise will be displayed. This is in contrast to how merchandise is displayed in stores such as Target or Walmart.
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Slide 22
Antecedent Conditions
Antecedent conditions are situational characteristics that the consumer brings to a particular information processing, purchase, or consumption environment. Examples of antecedent conditions include economic resources, orientation, mood, and security and fearfulness which can shape the value in a situation.
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Slide 23
Economic Resources
As you just learned, one antecedent condition is a consumer’s economic resources. A consumer’s buying power is the total amount of economic resources the consumer brings to a specific purchase setting. This total amount may include cash, credit card spending limits, and funds available through debit card or checking account. The amount of money a consumer has on hand will often dictate where they shop.
Many Americans live from paycheck to paycheck. During the past few years, with the country experiencing an economic crisis with employee layoffs, further hardships have been created for families to contend with. Additionally, consumers also experienced hardships related to trying to pay their mortgages after interest rates rose on their adjustable rate mortgages. To aid with these financial hardships, consumers often rely upon check advance services that are available through such establishments such as Amscot who offer payday loans. These payday loans allow the consumer to make ends meet by providing a way for them to get their pay before their company issues them the check. However, the interest rate charges for a payday loan are often extremely high since the loan payback is required within three weeks. The increased expenses associated with the financing for a home mortgage or a payday loan decrease the consumer’s overall buying power.
Not all consumers budget their finances. In fact, most consumers do not perform any type of formal budget process. However, consumers who do budget have different spending habits than those that don’t use a budget. Typically, consumers who budget their finances are more frugal. Some consumers perform mental budgeting which is a mental account of their expenditures. If the consumer over spends in one area, more than likely, they will make up for it by spending less in another area.
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Slide 24
Orientation
As consumers, we typically are oriented to shop a certain way that provides value for us. A shopper’s orientation may be a temporary state. For instance, a family facing an economic hardship may change their grocery shopping habits to accommodate the hardship. They may do more comparison shopping, purchase store brand products which are cheaper, shop during weekly sales, and use manufacturer and store coupons. Their orientation has become more price conscious as they try to save money. A consumer who usually has a strong experiential orientation may temporarily become more task-oriented.
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Slide 25
Mood
It will probably not come as a surprise to you that the antecedent condition of mood has an impact upon our shopping behaviors. Consumers bring their current mood with them when they go shopping. Consumers in bad moods have been known to binge consume. For instance, a woman has a bad day at work and on her way home she stops at a seven eleven and purchases some Oreos. Her bad mood enhances the value of the Oreos temporarily because it provides her with hedonic value from the delicious chocolate taste and it also serves a therapeutic purpose by helping to improve her mood.
The mood that consumers bring to a shopping experience has the potential to exaggerate the actual experience. A consumer in a good mood may receive even greater hedonic value from shopping then they usually do. Our mood can also affect our spending habits and satisfaction. Shoppers in a bad mood are more likely to only buy what they need and they experience lower satisfaction than a consumer in a good mood.
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Slide 26
Security and Fearfulness
The last antecedent condition concerns our security and fearfulness. With the increasing rates of vandalism, muggings, car jackings, assaults, abductions, and terrorism in our country, consumers are constantly reminded of the dangers that lurk when we are out and about in our community. Criminals target unsuspecting victims in large store parking lots and consumers are fearful for their safety at times. This is especially the case for consumers who feel vulnerable. Areas where large numbers of people gather such as airports and shopping malls are known to be potential targets for terrorist activity which creates even more fear in consumers.
Consumers can be affected by fearfulness during their shopping experience. A consumer who shops while in a fearful mood won’t shop in the manner that they typically do. They will buy less and enjoy the experience less. Some fearful shoppers may opt to do their shopping online from the safety and security of their home. However, consumers may be fearful of providing their private information during a purchase transaction due to the risk of identity theft.
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Slide 27
Check Your Understanding
Slide 28
Summary
We have reached the end of this lesson. Let’s take a look at what we’ve covered.
We began our lesson talking about how situational influences have an effect on value and that the context of a situation will have an impact on how we behave as consumers. Then, we discussed the value of time for consumers and defined temporal factors which are situational characteristics related to time. Time pressure is the urgency with which a consumer must make a decision based upon either a self-imposed or real deadline. We then noted that regularly occurring conditions that vary with time of year is known as seasonality and that consumption habits and value are affected by the time of year. The time of day or circadian cycle is the set rhythm in our bodies that varies with the time of day and is responsible for our sleep and wake cycles and productivity. Our options for shopping have increased dramatically over the years with more online shopping being conducted.
You then learned that the official definition of shopping is value-producing activities that increase the changes that something will be purchased. The four different types of shopping activities were identified and include acquisitional, epistemic, experiential, and impulsive.
You then learned that the personal shopping value is the overall worth of a shopping activity when all related costs and benefits are considered and that retail environments can have a personality. A retail personality is how a store is defined in the mind of the shopper based on the functional qualities of the store and the affective qualities. Impulsive consumption is characterized by three components including being spontaneous, a decreased regard for consequences, and a need for immediate self-gratification.
Next, our discussion continued with a comparison of impulsive shopping versus unplanned shopping. Unplanned shopping differs from impulsive shopping in that it involves situational memory and a utilitarian orientation. Impulsive shopping and unplanned shopping share the characteristic of spontaneity. At times, it is not easy to distinguish between impulsive consumer behavior and unplanned consumer behavior. The line between the two is sometimes fuzzy since some unplanned behaviors are impulsive and some impulsive acts are unplanned. All consumers are susceptible to impulsive and unplanned purchases, but individual characteristics and personality traits play a role also. The tendency for a consumer to inhibit outside influences from interfering with shopping is known as consumer self-regulation. Some consumers are much better at self-regulating than others. Consumers who have high levels of self-regulation are known as action-oriented. Those with low levels are known as state-oriented.
Next slide
Slide 29
Summary, continued
Our lesson continued with the three characteristics of compulsive behavior which are that it is harmful, somewhat uncontrollable, and driven by chronic depression. Next, we discussed retail and service atmospheres and learned that the emotional nature of an environment and the feelings created when the attributes are combined is known as atmospherics. Atmosphere elements create a positive, pleasant shopping experience for consumers. The use of odors, music, colors, and merchandising are all examples of how atmosphere elements can impact upon the feelings created for the consumer during the shopping experience.
We next learned that situational characteristics the consumer brings to a particular information processing, purchase, or consumption environment are known as antecedent conditions. Examples of antecedent conditions are economic resources, orientation, mood, and security and fearfulness. The first antecedent condition of economic resources includes a consumer’s buying power which is the total amount of economic resources the consumer brings to a specific purchase setting. The second antecedent condition is orientation. Orientation refers to the type of shopper we typically are. However, our shopping orientation may be temporary when situations warrant more price consciousness. Mood, the third antecedent condition, impacts upon our shopping behaviors. Consumers in a good mood receive greater value from their purchases than those in a bad mood. Mood also has the potential to exaggerate the actual shopping experience. Our spending habits and satisfaction are affected by our mood as well.
Finally to conclude the lesson we looked at the last antecedent condition which relates to a consumer’s sense of security and his fearfulness level. Due to increases in crime, consumers may not feel safe and secure while shopping and any fear that is felt may affect shopping behaviors. Some consumers have turned to the Internet to shop to alleviate these concerns.
This completes the lesson.
MKT305: Week 6 Lecture: Consumer Behavior: Group and Interpersonal Influence
Slide #
Topics
Narration
Slide 1
Introduction
Welcome to Consumer Behavior.
In this lesson we will discuss group and interpersonal influence.
Next slide.
Slide 2
Topics
The following topics will be covered in this lesson:
Reference groups;
Group influence;
Conformity;
Types of social power;
Reference group influence;
Informational influence;
Utilitarian influence;
Value-expressive influence;
Value and reference groups;
Reference group influence on product selection;
Social media and group influence;
Individual differences in susceptibility to group influence;
Word of mouth;
Positive and negative word of mouth;
Buzz marketing;
Stealth marketing;
Opinion leaders;
Diffusion processes;
Household decision making; and
Traditional family structure.
Next slide.
Slide 3
Topics, continued
Slide 4
Reference Groups
By nature, humans want to belong to a group since we are social creatures who like contact with others. Consumers belong to numerous formal and informal groups which exert great influence over their consumer behavior. One such group is a reference group. A reference group is a group of individuals who have an impact on consumer evaluations, aspirations, and behavior. As a result of this reference group membership, consumers are influenced to receive value from the consumption process and group membership. If you work, more than likely one of your reference groups is your work colleagues. Another reference group may be one’s family or church members. Or, perhaps it is a group that exists virtually online via a social networking site such as Facebook or Twitter. If you give it some thought, you can identify many reference groups that you belong to as a consumer.
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Slide 5
Group Influence
The influence that a group can have over a consumer cannot be understated. Group influence refers to the manner in which group members influence opinions, attitudes, and behaviors of other group members. Typically, group members do the following:
Share common goals and interests;
Communicate with each other;
Share a set of expectations, rules, and roles; and
View themselves as members of a common social unit.
However, some groups have more influence over their members than others do.
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Slide 6
Group Influence, continued
A primary group is one that includes members that have direct and frequent contact with each other such as family members. This group has the most influence on its members and the group also has very strong social ties to each other. For example, the consumer behaviors and habits of parents often have an influence on the behaviors and habits of their children.
A secondary group is one whereby the group members do not interact very often and their influence on members is not as strong. An example of a secondary group would be a professional organization such as the Society for Human Resource Management. An individual with an interest in human resources or who works in this capacity might be interested in belonging to a group such as this.
A group where the consumer formally becomes a member is a formal group. A formal group has rules, values, and official codes of conduct. A sorority or fraternity is an example of a formal group. As you can imagine, an informal group is one that requires no application and codes of conduct often do not exist. A group of women who meet twice weekly for a group fitness class at the gym is an example of an informal group.
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Slide 7
Conformity
One aspect of living in the United States is our expectation to conform to societal ways and expectations to a certain degree. Conformity is a topic in consumer behavior that relates to group influence. Conformity occurs when the consumer yields to or complies with the attitudes and behaviors of other consumers. A closely related concept is that of peer pressure. You are probably well aware of the influence that peer pressure can have on individuals, especially during the adolescent years. Peer pressure is realized when one feels pressured to behave in a way that conforms to group expectations. It is considered one of the strongest types of group influence that exists. Teens often experience peer pressure in regard to experimenting with alcohol and drugs.
Peer pressure can be either positive or negative. A teen who has recently decided that she will no longer text while she is driving because her friends have been encouraging her to no longer do this, has experienced positive peer pressure. Negative peer pressure is often used to encourage counterproductive and sometimes even illegal behaviors. For example, a group of men attend professional football home games in their city. One of the men in the group does not drink alcohol. During the games, the other men in the group routinely pressure this member to drink even though they are aware he is a non-drinker.
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Slide 8
Types of Social Power
We would be doing a disservice to the topic of reference groups if we did not discuss the influence of the different types of social power that have been identified. Social power is the ability of an individual or a group to alter the behaviors and actions of others. Due to this, social power can have a huge influence on the products we purchase, our attitudes, and our activities.
There are five types of social power that have been identified. The first is referent power. Referent power can be seen when a consumer imitates the behavior and attitudes of groups as a way to identify with the group. For example, a consumer has recently been training for her first five K race. She joins a local running group and imitates the actions and behaviors of the other group members as a way to identify herself as a runner. The second form of social power is known as legitimate power and it is dependent upon one’s position in a group and the type of power that is associated with the position. One’s supervisor at work has legitimate power over an employee.
Expert power is the third type of social power that has been identified. Expert power refers to the ability of a group or individual to influence a consumer due to the group’s or individual’s knowledge of, or experience with, a specific subject matter. For instance, if a consumer were interested in learning more about diabetes since they were recently diagnosed with the disease. They could easily tap into the expert power that is available online via the American Diabetes Association’s website that contains comprehensive information about the topic of diabetes.
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Slide 9
Types of Social Power, continued
The fourth type of social power is reward power and based upon its name, it is probably easy for you to figure out exactly what it refers to. Reward power is realized when a group has the capability to reward its members for compliance with group expectations. The receipt of a varsity letter for participation in a respective high school sport is an example of reward power.
Coercive power is the last type of social power that has been identified. This type of power occurs when a group exerts coercive power over its members. If the member does not give in to the expectation, sanctions can be imposed which can be harsh and result in a loss of group membership. Members of athletic groups may face severe penalties if they are discovered to be using illegal substances.
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Slide 10
Check Your Understanding
Slide 11
Reference Group Influence
To better understand the overall influence of a reference group on a consumer’s behavior, we must first know about the group influence process. Further, we will benefit from knowing more specifically how consumers are persuaded via the three different categories of influence which include:
Informational influence;
Utilitarian influence; and
Value-expressive influence.
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Slide 12
Informational Influence
As consumers, we often find it helpful to be able to tap into information available from groups to aid in decision-making. This is known as informational influence. Informational influence is the way in which a reference group can influence a consumer since the consumer can use the attitudes, behaviors, and information available from the group to make a more informed decision. For instance, a consumer is seeking advice regarding the purchase of a new vehicle. The consumer will probably gather information from their reference groups which may include their extended family and work colleagues. Or, perhaps a consumer may opt to try a new food or beverage when they observe their son drinking it. Internet blogs and discussion groups are also sources of information which may influence consumer behaviors.
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Slide 13
Utilitarian Influence
The second type of reference group influence is utilitarian influence. Utilitarian influence occurs when a consumer will conform to the expectations of the group in order to receive a reward or to avoid punishment. For example, many teenagers are quite particular about the brand of clothing they will wear. Some teens have a preference for wearing the popular brands. When teens wear popular brands of clothing, they are being influenced in a utilitarian manner and they receive acceptance and approval from the reference group. However, when teens do not comply with the clothing expectations of the group, they may be socially shunned. This treatment serves as a punishment for not complying with the expectations of the group in terms of which brand of clothing is acceptable to wear.
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Slide 14
Value-Expressive Influence
The third type of influence that a reference group can yield is value-expressive influence. This type of influence occurs when a consumer wants to become a member of a group that holds similar values and beliefs. For instance, many military veterans belong to community-based clubs which require past active military duty as a prerequisite for membership. The group members share similar values regarding our national security and defending our freedoms as Americans. Membership in reference groups also allows members to portray a self-image that is consistent with the values held by the other group members. It is important to note that the individual’s self-image is influenced by the group.
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Slide 15
Value and Reference Groups
There are many outside influences that impact upon the value that a consumer receives from an activity. In this way, reference groups and value are related. A consumer may receive utilitarian value through membership in a group. For example, a consumer who works as a Director of Human Resources has been diligently studying to take the examination to become certified as a Professional in Human Resources. After they have successfully completed the exam, they are eligible to join the Society for Human Resource Management. They receive great value from the time, effort, and work that they put into receiving their professional certification.
A consumer may also realize hedonistic value simply from attending group meetings, events, and activities. The consumer receives value in the form of fun and enjoyment from participation in group activities.
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Slide 16
Reference Groups Influence on Product Selection
Exactly how do reference groups influence consumers regarding the types of products that they select to purchase? The first way is by looking at the situation in which the product is used or consumed. Products which can be easily seen by others are known as public products. Examples of public products are jewelry and clothing. Products that are not easily seen by others are considered private products. Examples of private products are bed linens and bar soap.
The second way that reference groups influence our product selection concerns whether or not the product is considered a necessity or a luxury. For instance, a stove is a necessity, but a Rolex brand watch is a luxury. The third way that reference groups influence product selection depends upon whether a particular product or brand is selected.
For products that are necessities, the influence that a reference group has is relatively weak in terms of product selection. However, for products that are public necessities, the reference group’s influence on brand selection is strong. For luxury products, reference group influence is strong. But, group influence on actual brand selection is only strong for public luxury items such as a motorboat for example.
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Slide 17
Social Media and Group Influence
The influence of the Internet on how we communicate with each other has drastically changed over the years. Now, it is routine for consumers to interact via various social media websites. However, what type of influence does social media have on our behaviors as consumers? Social media has the potential to have a huge impact upon our behavior as consumers, depending upon how much we use these sites.
Before we continue, let’s distinguish between some terms so that we have clarity regarding what each one means. Social media refers to the actual media through which communications happen. Examples of social media are the Internet, television, cell phones, and radio. Social networks are consumer networks formed which are based on shared and common interests or goals. A social networking site is a website that facilitates online social networking. Examples of social networking sites are Facebook, Twitter, LinkedIn, and MySpace. A great deal of social networking on these sites is conducted through mobile media such as laptops, cell phones, and iPads.
The value and group influence that can be seen via the increasing usage of social media websites validates the benefit of staying connected with friends, family, and other social groups. Consumers are able to join groups, make connections with others, purchase products, gather information, and spread information via word-of-mouth.
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Check Your Understanding
Slide 19
Individual Differences in Susceptibility to Group Influence
Even though we have established the influence that reference groups have on us as consumers, this does not mean that all consumers will act the same way in the same situation or be equally influenced to conform to the expectations of the group. Three individual differences have been identified that determine how susceptible we are to group influence.
The first individual difference is susceptibility to interpersonal influence. This refers to the level of need an individual has to enhance their image by purchasing and using products, conforming to others expectations, and observing others to learn about products. Consumers who are particularly susceptible to interpersonal influence value luxury items and the benefit of quality and image that are tied to their possession. Individuals such as this seek approval from others through the types of products that they acquire. As a result they are more likely to avoid any negative perceptions or impressions from others in public settings.
The second individual difference in susceptibility is attention to social comparison information. Consumers are concerned about how others react to their behavior. If a consumer is out shopping with a friend, they may exhibit different shopping and purchase behaviors than when they are shopping alone based upon their concern with paying attention to what others think.
The last individual susceptibility difference is referred to as separateness-connectedness. This simply means that consumers are different as to their feelings of connectedness to other consumers. A consumer that perceives them self as distinct and separate from others is said to possess a separated self-schema. One who perceives them self as an integral member of the group is said to possess a connected self-schema.
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Slide 20
Word of Mouth
Each of us as consumers have used word-of-mouth to share our opinions, attitudes, and feelings regarding products with our friends, family members, and colleagues. Word-of-mouth refers to information about services, products, and experiences that is transmitted from consumer to consumer. Two types of word-of-mouth influences have been distinguished with the first type referred to as organic. Organic word-of-mouth happens when a consumer enjoys a product or service. The consumer wants to share his experience with the product. Amplified word-of-mouth occurs when marketers try to increase word-of-mouth in current circles. They may also opt to develop a new forum for word-of-mouth such as an online discussion board. Word-of-mouth is very influential and consumers are more apt to believe other consumers than they are advertisements and marketing messages from a company.
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Slide 21
Positive and Negative Word of Mouth
Consumers like to talk about their experiences with other people and they are more likely to provide positive comments about a product when they are satisfied with it. Additionally, when a product has relevance to a consumer’s self-concept and the consumer is highly involved, they are more apt to spread positive word-of-mouth information to others.
The spread of negative word-of-mouth information has the potential to be very damaging to a company and its reputation. The reason for this is because negative word-of-mouth information is highly influential and even more influential than positive word-of-mouth information! Further, when a consumer has a bad experience, they will tell more people about it than if they had a good experience.
Social networking sites are increasingly being used to spread word-of-mouth information, whether it be positive or negative. Consumers are becoming accustomed to searching the Internet for advice on hundreds of topics and issues. Some companies encourage the spread of information between consumers and there are many sites online that provide venues for this type of interaction. Company websites may provide discussion boards for consumers to participate in. However, it is important to note that the company must also be conscientious of monitoring the content of the discussion boards. Text messaging is another mode of communication that is used to spread word-of-mouth information.
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Slide 22
Buzz Marketing
A concept that is related to word-of-mouth marketing is buzz marketing. Buzz marketing is a marketing tactic that companies use to create and generate excitement that is spread among marketing segments. The introduction of the new Volkswagen Beetle car and the buzz that was created each time a new Harry Potter book was preparing to be released are examples of buzz marketing. Buzz marketing is a form of guerrilla marketing which is marketing a product using unconventional means. Viral marketing is becoming increasingly popular online through social networking sites. Viral marketing techniques encourage consumers to spread marketing messages using online technologies.
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Slide 23
Stealth Marketing
Another form of marketing that is somewhat controversial is stealth marketing. Stealth marketing is a guerrilla tactic and it is similar to buzz marketing. However, the difference is that with stealth marketing, the consumer is not aware that they are being marketed to. For instance, Blackberry used stealth marketing techniques for an ad campaign where they paid attractive actresses to flirt with men in New York City bars with the goal of getting the men to give the actress their cell phone number. The actress would hand her Blackberry to the man and request that he input his cell phone number. The men were unaware that they were being targeted by the company to increase their interest in Smart phones.
The placement of products in television shows and within movies is another form of stealth marketing since the public is unaware that companies pay for these product placements. Women have been found to have more positive attitudes toward product placements than men do.
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Slide 24
Opinion Leaders
The use of opinion leaders for buzz marketing is especially effective. Opinion leaders are knowledgeable consumers who hold great influence on others behavior as it relates to the adoption of a product and its purchase. Typically, opinion leaders are socially active and self-confident. However, the specific characteristics for an opinion leader depend upon the type of product that is being considered.
Two other types of leaders are also used to influence consumers. The first is referred to as a market maven. A market maven is a consumer who shares information about a variety of products and services available. The main difference between an opinion leader and a market maven is that the market maven’s influence is not specific to a category. On the other hand, a surrogate consumer is one who is hired to provide input regarding a purchase decision. Examples of surrogate consumers are interior designers, travel consultants, and stockbrokers.
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Slide 25
Check Your Understanding
Slide 26
Diffusion Processes
Diffusion processes refer to the manner in which new products are adopted and spread throughout the marketplace. Marketers know that different groups of consumers will adopt new products at different rates. Five adopter categories of consumers have been identified and include the following:
Innovators;
Early adopters;
Early majority;
Late majority; and
Laggards.
Consumers in the innovator and early adopters category are more influential when they talk about products with members of other groups. As a result of this, they can be considered an opinion leader for specific product categories. They are often risk takers and well off financially. Early adopters tend to be young and well-educated. Late majority consumers and laggards are more cautious about buying new products and wait longer to do so. They are also older with lower levels of education.
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Slide 27
Household Decision Making
Who makes the decisions regarding purchases in your household? Does it depend upon what is being considered for purchase as to who makes the decision? As you learned previously in this lesson, the family is often a reference group for consumers. Family members often have much influence over each other’s attitudes, behaviors, and thoughts. Household decision making is the process by which the household unit makes decisions about purchases.
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Slide 28
Traditional Family Structure
The definition of what constitutes a family has changed considerably over the years. Traditionally, a family consisted of two people related by blood or marriage who lived together. However, the definition has become quite broad with the increase in same sex unions and marriages, single-parent homes, multigenerational homes, and blended families.
The household life cycle is an important concept in terms of consumer behavior. Household life cycle refers to the acknowledgement that changes in a family’s composition and income will alter household demand for products and services. For instance, anyone who has sent their son or daughter off to college knows that their grocery bill and other expenses related to supporting this child in the home environment will decrease upon their departure for college.
Middle-aged consumers are facing situations that affect their consumption habits. One such situation is the trend for kids to return home to their parents’ house after graduating from college. This group is known as the boomerang generation and often the reason for returning home has to do with debt that is incurred during college and the lack of jobs for new college graduates due to the economic recession. Middle-aged consumers are also dealing with challenges related to raising a family and caring for their aging parents. Consumers in this situation are referred to as the sandwich generation.
Family members each play a role in product purchases and five roles have been identified that relate to the household purchase process. The first role is that of influencer who is the person in the household that realizes a need and provides information about a purchase to other family members. The second role is known as the gatekeeper. The gatekeeper is the family member who controls the flow of information into the household. The third role is that of user. The user is the actual user of the product being considered for purchase. Next is the decision maker who, as the name implies, is the person who makes the final decision about product purchase. The final role is that of purchaser who is the person who buys the product.
As you know, our society has expectations for individual behavior based upon our gender and this can be seen in the family structure. Typically, men worked outside the home and women were expected to meet the daily needs of the family and take care of the home. However, with the increase in educated women, women working outside the home, and two income families, the expectations for our behavior based upon our gender are changing. A family’s sex role orientation refers to the ways that the family makes household decisions. In families with a traditional sex role orientation, it is often the responsibility of the man to make large purchase decisions. Families with a more modern sex role orientation practice a more democratic approach to decision making.
The role that children have in household decision making is evolving with children playing a larger role in influencing many household purchases. Marketers are also aware that many teens have disposable income earned through an allowance or part-time work.
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Slide 29
Check Your Understanding
Slide 30
Summary
We have reached the end of this lesson. Let’s take a look at what we’ve covered.
First, we discussed what a reference group is and how members receive value from membership. We saw that social networking sites are becoming increasingly popular venues for reference group activity. We went on to discuss how group members influence the opinions, attitudes, and behaviors of others who share common goals and interests. Some types of groups are more influential than others. Then, you learned about conformity and how some consumers yield to the attitudes and behaviors of others through such methods as positive or negative peer pressure.
Our lesson continued with a discussion of the different types of social power that exist including referent, legitimate, expert, reward, and coercive and how each works to influence consumer behavior. We learned that the group influence process includes three different categories of influence. The first is known as informational influence and it refers to the ways that a reference group can influence a consumer by providing information. We also noted that utilitarian influence occurs when a consumer conforms to group expectations to receive a reward or to avoid punishment. The third type of influence we looked at was value-expressive influence. It occurs when a consumer wants to become a member of a group that possesses similar values and beliefs.
You next learned about the influence that a reference group can have on product selection and that there are three issues that influence product selection. The first issue is the situation in which the product is used. Secondly, it depends upon if the product is a luxury item or a necessity item. Lastly, the particular product or brand selection is a factor as to whether or not a group will influence an individual’s choices.
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Slide 31
Summary, continued
We then discussed the role of social media on group influence and determined the differences between social media, a social network, and social networking sites. Our lesson continued with the three individual differences that have been identified that determine how susceptible individuals are to group influence. The first individual difference is susceptibility to interpersonal influence and it refers to the level of need an individual has to enhance his image by purchasing and using products, conforming to others expectations, and observing others to learn about products. The second individual difference in susceptibility is attention to social comparison information and it happens when a consumer is concerned about how others react to their behavior. The last individual susceptibility difference is referred to as separateness-connectedness. This simply means that consumers are different as to their feelings of connectedness to other consumers.
We later discussed word of mouth. We learned that word-of-mouth is information about products and our experiences that we share with other consumers. This type of information can be either organic or amplified. We saw that organic word-of-mouth happens when a consumer enjoys a product or service and wants to share his experience with the product. While amplified word-of-mouth occurs when marketers try to increase word-of-mouth in current networking circles.
You next learned about the impact of positive and negative word-of-mouth and how influential each can be. Consumers are more apt to spread negative information versus positive. We noted that buzz marketing is a marketing tactic used to generate excitement among consumers and stealth marketing is a guerrilla tactic used whereby consumers are unaware that they are being marketed to. Then, we talked about the role of an opinion leader and the definition and use of a market maven and surrogate consumer.
Our lesson continued with a discussion about diffusion processes which are the ways in which new products are adopted by consumers. We noted that consumers adopt products at different rates and five categories of adopters.
Finally to conclude the lesson we talked about household decision making which is the process by which the household unit makes decisions about purchases. Then, we talked about the trends that are being seen in regard to the makeup of the family and how the current definition of family is relative broad. You learned about the five household purchase roles which included the following:
Influencer;
Gatekeeper;
User;
Decision-maker; and
Purchaser.
We also discussed how children are playing a bigger role in household purchase decisions.
This completes the lesson.
MKT305: Week 7 Lecture 2: Consumer Behavior: Decision Making I: Need Recognition and Search
Slide #
Topics
Narration
Slide 1
Introduction
Welcome to Consumer Behavior.
In this lesson we will discuss decision making and need and search recognition.
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Slide 2
Topics
The following topics will be covered in this lesson:
Consumer decision making;
Decision making and choice;
Decision-making perspectives;
Rational decision-making perspective;
Behavioral influence decision-making perspective;
Decision-making approaches;
Extended decision-making;
Limited decision-making;
Habitual decision-making;
Need recognition;
Search behavior;
The consideration set;
External search;
The role of price and quality in search process;
External search and the Internet;
Amount of search; and
Search regret.
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Slide 3
Topics, continued
Slide 4
Consumer Decision Making
On a daily basis we make numerous decisions as consumers. What do I need at the grocery store for dinner? Which grocery store is on my way home from work? Where will I buy soccer cleats that my daughter needs for practice? Some decisions are obviously bigger than others. Making a decision as to what items are needed to make dinner entails much more than deciding where to go to college for example.
Remember from our prior lessons that the consumption process begins with the recognition of a need. For instance, a consumer realizes that they needs golf balls since they has lost a lot while practicing on the golf course. However, some consumers may realize a need for something, but wait to buy it at a later date.
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Slide 5
Decision Making and Choice
The end goal of the decision-making process is that a choice is made. However, we must be conscientious of the fact that the choice that is made does not necessarily involve a purchase. The decision-making process does not always involve an actual tangible product. For example, a consumer may make the choice to volunteer at their son’s elementary school a few hours a week. The decision is made to trade the consumer’s time for the value that they receive from the volunteer experience.
Decision-making is also related to both motivation and emotion. In terms of motivation, consumers are motivated to make decisions to address an identified need. Regarding emotion, it depends upon the type of product that is being considered. Consumers may become frustrated, impatient, irritated, or angry as they attempt to make difficult decisions or when they can’t find acceptable solutions to a problematic situation.
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Slide 6
Decision-Making and Choice
The decision-making process can be viewed from a couple different perspectives including the rational decision-making perspective and the behavioral influence decision-making perspective. It is important to note that these perspectives serve as theoretical frameworks for which decision-making can be viewed. Additionally, most consumer decisions can be analyzed by using a combination of these two perspectives.
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Slide 7
Rational Decision Making Perspective
The rational decision-making perspective is considered the traditional approach to studying decision-making. It assumes that consumers are rational beings that diligently gather information about purchases, product features, brands, and attributes before making an informed decision as to what to purchase. A consumer who buys a new cell phone and gathers information about text messaging and Internet access capabilities and monthly service fees before making a decision as to which provider to use would be following a rational-decision making process.
Even though this perspective makes sense, not all consumers follow it in all situations since some decisions are made with very little thought or effort beforehand. What is considered rational to one consumer may not be rational to another. For example, one woman may feel that buying a thousand dollar Coach handbag is rational, while another woman may feel that it is irrational to spend this much money for a purse.
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Slide 8
Behavioral Influence Decision Making Perspective
The behavioral influence decision-making perspective assumes that many decisions are learned responses to environmental influences. Clothing stores that cater to adolescents are known for piping upbeat, contemporary music into their stores to make for a more pleasant shopping atmosphere that will encourage purchases.
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Slide 9
Decision Making Approaches
The actual decision-making approach that a consumer takes will depend upon the amount of involvement a consumer has with the product and the amount of risk involved with the decision. As involvement and risk increase, consumers are more cautious about their decision-making process and often take more time making the decision. The perceived risk is the perception of the negative consequences that will result from a specific course of action that is being considered, as well as the uncertainty of which course of action is actually the best to take.
Consumers face many different types of risk including financial which is the risk associated with the cost of the product. Social risk is the risk that relates to how other consumers will view the purchase. Performance risk refers to the risk associated with the likelihood that the product will perform as the consumer expects it to. While physical risk has to do with the risk associated with product safety and the likelihood that physical harm will result from its consumption. Lastly, time risk refers to the risk associated with the amount of time required to search for the product.
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Slide 10
Extended Decision Making
Decision-making approaches can be classified into three categories. The first category is known as extended decision-making. When consumers practice extended decision-making they often search diligently for information that will aid them in making a satisfactory decision. The information that is gathered can be from previous experience or from external sources such as the Internet. After information is gathered, the consumer carefully assimilates it and evaluates each option based upon whether it will meet the need identified. For the most part, extended decision-making is a lengthy process since it occurs when there is high involvement and significant purchase risk. Big ticket items such as automobiles, expensive jewelry, houses, and televisions are purchased after an extended decision-making process has taken place.
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Slide 11
Limited Decision Making
The second category of decision-making approaches is limited decision-making. When consumers use limited decision-making, they do not search for very much information about a product and often reach a decision based on prior beliefs about products and their attributes. Little comparison between brands is performed. Since consumers often experience time constraints, limited decision-making is used frequently. There are typically low amounts of purchase risk and product involvement in limited decision-making situations. For example, the decision to purchase grocery staples such as bread, milk, eggs, and butter would typically involve limited decision-making. This is due to consumers already being aware of the attributes of these products and often little to no comparisons are made between products such as these.
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Slide 12
Habitual Decision Making
The third category of decision-making is referred to as habitual decision-making or routine decision-making. This type of decision-making occurs when the consumer does not seek information when a need is identified. The consumer’s choice is often based on habit and the brand the consumer prefers. Most consumers have favorite types of foods that they routinely purchase and consume.
Brand loyalty is a strong commitment to buy a product regardless of the situational influences. The consumer has a bond with the product. For example, some consumers prefer Lay’s potato chips over a competing brand. Brand inertia happens when a consumer repeatedly buys a product without any real attachment to it.
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Slide 13
Check Your Understanding
Slide 14
Need Recognition
As you have already learned, the decision-making process begins with the recognition of a need. The need is recognized when there is a difference between the consumer’s actual state and their desired state. The actual state is their perceived current state. Their desired state is the perceived state that the consumer strives for. For example, a consumer realizes that they have run out of Listerine mouthwash. They have a need for this product. Since they use it twice daily, the consumer will be motivated to satisfy this need soon. However, not all needs that are identified prompt the consumer to make a purchase. For instance, a consumer who is a runner knows that running shoes should be replaced after running three hundred to five hundred miles. Since the consumer runs an average of twenty miles per week, they know that their running shoes will need to be replaced within four to five months.
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Slide 15
Search Behavior
After a need has been identified, consumers will seek information to use to satisfy the need. Consumers will search for such information as the following:
The number of alternatives available;
The price of the alternatives;
The attributes of all alternatives available; and
The performance of each attribute.
Four types of search behaviors have been identified. The first is referred to as ongoing search. Ongoing search entails seeking information simply because the consumer has an interest in a particular topic, product, or organization. High school juniors often engage in ongoing search when they are gathering information about where to go to college, the different offerings of colleges, and the options for academic majors. The focus of an ongoing search isn’t necessary to make a purchase. Rather, it is staying up to date on a topic of interest.
The second type of search behavior is known as prepurchase search. Prepurchase search activities are conducted to locate information to enable the consumer to make a decision for a specific purchase. For instance, a family needs a new washing machine. They search online to gather information regarding the different models, brands, prices, and features of washing machines.
One problem that consumers have found with searching the Internet for information is information overload. Information overload is when too much information is presented and the consumer has difficulty assimilating it all. One way to alleviate information overload is to join social networking sites such as Facebook. Many businesses are using Facebook to provide consumers with specific information regarding their products and they frequently provide input and comments from other consumers regarding the product features, attributes, and functionality.
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Slide 16
The Consideration Set
Consumers will perform an internal search of products and services to retrieve knowledge about them that is stored in memory when a need is identified. This is done to find possible solutions to the problem that can help the consumer make a decision. The consideration set is all alternatives that are considered acceptable for further consideration in decision-making. For instance, a mother is planning a special sixteenth birthday party for her daughter and needs a birthday cake. She conducts an internal search of her memory and remembers that her daughter’s favorite flavor of cake is chocolate with chocolate frosting. Typically, Mom makes a cake from a box mix and uses canned frosting. However, since this is her daughter’s sweet sixteen birthday party, Mom considers other alternatives such as getting a decorated chocolate cake with chocolate frosting from the bakery at the grocery store.
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Slide 17
External Search
At times, consumers do not have sufficient information stored in their memories to help them with adequate problem solving. Because of this, an external search is necessary. External search involves gathering information from sources external to the consumer such as friends, family, salespeople, advertising, or the Internet. Factors such as how easy it is to obtain the information, how objective the source of the information is, the trustworthiness of the source, and the speed with which the information can be obtained are all considered by consumers when they are conducting an external search. Typically, consumers will find information from family and friends to be dependable. However, information obtained from salespeople or advertising is considered less credible for input into decision making.
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Slide 18
The Role of Price and Quality in Search Process
Consumers use both price and quality as evaluation criteria to aid with decision-making and they tend to seek information regarding price and quality early in the search process. A product’s price is related to the value that the consumer will receive. A high price tag on a product typically is a bad thing for most consumers. This is especially the case for consumers who are bargain conscious. However, a product’s price may also signal how desirable the product is and the amount of prestige that will be associated with it if the consumer purchases it. For example, many consumers would not want to spend the money to purchase a BMW automobile since they feel the price is too high. However, some consumers are willing to pay a higher price tag for a luxury car because of the prestige that its possession will provide the consumer.
Consumers are almost always interested in the quality of products. Quality represents the perceived overall goodness or badness of a product. Quality perceptions happen before and after the purchase takes place; however consumers do not always seek high quality because it may not be necessary or desired. For instance, a consumer decides to purchase a new vehicle. The consumer has limited funds and is conscientious of gas mileage, car payments, and their insurance rates increasing because they are buying a new car. They decide to purchase a lower quality economy car that provides them with the features that they need which includes good gas mileage and low car payments. They are not interested in buying a larger, nicer car with more features because these are qualities that they are not interested in based upon their economic situation.
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Slide 19
External Search
The Internet is a tool that allows consumers to use websites such as Google, Ask, and Bing to search for information in simplified, efficient ways. Any question a consumer has can be Googled and within seconds thousands of websites will be at the consumer’s disposal to peruse. In this way, the Internet has improved consumer search activities in many different ways.
First, the Internet lowers the costs that are related to the search and it makes the process more productive. Think about yourself as an online college student. You have access to the university’s library online at your fingertips from the comfort of your home. Previously, many trips to the campus library would have been necessary to find and retrieve information for completing research papers and projects. Secondly, searching online can be an enjoyable activity and provide hedonic value to the consumer. Third, the ability to control the flow of information more efficiently is possible with Internet search activities when compared with a television commercial or radio ad for example.
Studies have revealed that Internet search behavior is impacted by the construction of the website that the consumer visits. One study found that consumers spend more time in three dimensional, interactive web environments than in two dimensional ones.
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Slide 20
Amount of Search
Many different factors influence the amount of search that consumers conduct to gather information to make a decision. One factor is the amount of experience a consumer has with a product. Prior experience usually influences how much a consumer searches. Moderately experienced consumers search for information more than either experienced or inexperienced consumers. The second factor influencing the amount of search conducted is the level of product involvement. Search activities tend to increase when a consumer has a high level of involvement with a product. The perceived risk for a consumer is another factor. As perceived risk increases, search effort increases. Lastly, the value of the search effort is a factor. Some consumers find value in the search process itself.
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Slide 21
Search Regret
There are times when consumers are unable to find the information they are seeking and due to this, the search process becomes emotional for the consumer. They may experience what is known as search regret. Search regret refers to the negative emotions that result from a failed search effort. When this happens, consumers often stop the search process and as a result, the decision-making process also stops. The consumer may feel that they have wasted their time by searching for information to help them self make a decision since the information they needed was not found.
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Slide 22
Check Your Understanding
Slide 23
Summary
We have reached the end of this lesson. Let’s take a look at what we’ve covered.
First, we learned that consumer decision making begins with an identified need and that not all decisions are equal. Some consumers may identify a need, but delay an actual purchase being made. The end goal of decision-making is to make a choice. However, the choice does not always involve a purchase or a tangible product for that matter. We are motivated to make decisions to address a need. At times, consumer decision-making may be emotional, depending upon the product being considered.
We then talked about some different decision making perspectives. We saw that the decision-making process can be viewed from a couple different perspectives including the rational decision-making perspective and the behavioral influence decision-making perspective. The rational decision-making perspective is considered the traditional approach to decision-making and it assumes that consumers are rational beings that gather sufficient information before making a decision. The behavioral influence decision-making perspective assumes that many decisions are learned responses to environmental influences. Perceived risk is the perception of the negative consequences that will result from a specific course of action that is being considered, as well as the uncertainty of which course of action is actually the best to take. Consumers face many different types of risk including financial, social, performance, physical, and time.
We next discussed extended decision making which involves searching for information to make a satisfactory decision. Consumers rely upon personal experiences and external sources to gather information before assimilating it and evaluating their options. Extended decision-making is often a lengthy process that involves high involvement and significant purchase risk. With limited decision-making, consumers do not search for product information and their decision is based primarily on prior beliefs about products and their attributes. Limited decision-making has low product involvement and low purchase risk. Habitual decision-making occurs when the consumer does not seek information when a need is identified. Their choice is based on habit and they may be loyal to certain brands of products.
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Slide 24
Summary, continued
Next, we discussed need recognition which is the beginning of the decision-making process. A need is recognized when there is a difference between the actual or current state and the desired state that the consumer strives for. The next step in the decision-making process is searching for information to satisfy the identified need. Consumers can conduct ongoing searches to find information they are interested in or they can conduct a prepurchase search where they gather information for an intended upcoming purchase. Some consumers may experience information overload where they are provided with too much information to assimilate. We later learned about an internal search. This type of search relates directly to the consumer’s experiences with products and services. When a problem is identified, consumers scan their memory for available solutions. The consideration set refers to the alternatives that are considered acceptable for further consideration in decision-making.
Later we studies external searches. When consumers do not possess sufficient internal information, they will conduct an external search whereby they will gather information from sources that are external to the consumer such as one’s family, friends, salespeople, advertising, or the Internet.
We next discussed the role of price and quality in the decision-making process since both are used as evaluation criteria. Price refers to the perception of the value a consumer will receive and it can determine the desirability of a product. Quality is the perceived overall goodness or badness of a product.
Then we talked about external search and the Internet. The Internet has provided consumers with a tool to simplify searching for information. The lower costs associated with online searchers and the increase in productivity are two factors that have been identified. Additionally, consumers are able to control the flow of information during Internet searchers and their search behaviors are impacted by how a website is designed.
You learned that the amount a consumer searches for information to make a decision is impacted by four different factors including product experience, product involvement, perceived risk, and the value of the search effort.
Finally to conclude the lesson, we looked at search regret. When a consumer searches for information to aid them with decision making and do not find it, they may experience negative emotions. This is known as search regret and the consumer may feel that they have wasted their time with the search effort since it failed to produce results to help them make a decision.
This completes the lesson.
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